Yesterday, the United States House of Representatives voted down the 700 billion dollar financial bailout of financial institutions that are on their way to default.
Regarding this current financial mess, on September 25th I posted on the American Conservative Party website, www.americanconservativeparty.org, that, “There is only one equitable resolution to the current problem, Chapter 11 Bankruptcy.” Frankly, for some time I felt that my opinion must be of no value because it was not validated by others. But, come today I see that Jeffrey A. Miron, a senior lecturer in economics at Harvard University had this to say, in part;
“The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.
Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.”
I feel better now…